Bull s
JK Holdings
Quarterly Report

July,201955No.

CONTENTSInternationalP1P2P3P4

Overview of the Financial Results for ＪＫＨＤAchieving the Highest Sales Record Ever
JK Holdings Draws Mid-Term
Management Plan Breakthrough 21
Prospect of Business Conditions for JulySeptember
Market Outlook Plywood
KEYTEC Yamanashi Sawmill Completed
Butsurin Co., Ltd. Established a New Company
An example of wooden building
Ariake-Nishi Gakuen

Overview of the Financial Results for JKHD for Fiscal
Year Ending March 2019 Achieving
the Highest Sales Record Ever
Housing starts totaled 952,936 units（up 0.7% from the previous yearʼs result）for ﬁscal 2018. Housing starts for theKeiichiro Aoki

President
JK Holdings Co.,Ltd.

owner-occupied, which is our main market, increased 2.0% to287,710 units. Under these business environments, our grouphas enhanced sales of lumber and precut in the basic material

As a result, the consolidated business results for the ﬁscalsector, has improved sales and proﬁtability for our privateyear found 358.935 billion yen in the net sales（3.7% increase

brands such as Bulls and J-GREEN items（legal lumber）,

compared with the same term in the previous year）, 4.976

and has worked on functional enhancement of our engineer-billion yen in the operating proﬁt（down 0.5%）, and 4.665

ing business to promote sales and improve proﬁtability in thebillion yen in the ordinary income（down 3.6%）. The current

building materials and housing equipment sectors.

net income for the year that is attributable to the parent company shareholders was 2.121 billion yen（down 26.3%）.

Company

JK Holdings Draws Mid-Term
Management Plan“Breakthrough 21”
The Japanese economy is expected toIn this context, the JKHD Group has

to changes in the business environments

recover gradually over the next few

formulated a new medium-term man-and create a structure capable of cop-years, while the global economy is un-agement plan for the period from ﬁscal

ing with such uncertain environments

certain for the future due to some slow-

2019 to 2021. With a slogan as “Break-while maintaining our policy of growth

down factors. In the housing industry as

through 21”, we will respond promptlyexpansion.

well, the market remains active due tolow interest rates on housing loans andthe promotion of energy conservation

Business Objectives
Net sales

OperatingproﬁtOrdinary
incomeCurrent net
income forthe yearOrdinary
income rate

2019

3,650

5047

261.29%

2020

3,700

52

49

28

1.32%

2021

3,750

5451

30

1.36%

through national policies, but structural factors for slowdown, such as thedeclining population and the number ofhouseholds hitting the peak before long,
would become apparent in the numberof housing starts.

Bulls International No.55

2Survey

Housing starts from April to October
2013, right before the consumption tax
rose from 5% to 8%, were 113% of theresults in the same period of the previous year（114% for the owner-occupiedhomes），while those from October
2018 to March 2019, with the tax ratescheduled to go up from 8% to 10% inOctober 2019, were only 103%（106%for the owner-occupied homes）of theyear-ago results.

Prospect of BusinessCondition forJuly-September<Demand Forecast byBuilders and Distributors>
The demand forecast for July-September 2019 when last-minute demands
before the consumption tax raise are expected continuously from the previousterm showed an index of plus 5.1 pointsamong builders and plus 9.2 points
among distributors, indicating theinﬂuence of the tax hike. It is, however,a big diﬀerence, from the past survey
conducted right before the tax increasein 2014 when it found plus 50.5 points
among builders and plus 52.1 points
among distributors. This is probably because the number of housing starts has
not increased since one year before thenext tax raise.

Another factor could be varied business
conﬁdence in diﬀerent regions. The
index stood at plus points in all regions in the previous time, but it was at
minus points in the Tohoku, Kanto, andKoshinetsu regions this time.
The surge in rushed demand before thetax hike appears to be low as expected, but the demand forecast remains
positive. The number of applications
for Flat 35 grew to 11,020, which was
112% over the previous yearʼs results. It
is important to provide suitable houses
that can meet usersʼ expectations.

Demand Forecast by Builders
642

65.1

4
2

0.3

00

1.0

<Sales Forecast by Leading
Manufacturers>
The sales forecast by leading manufacturers found a substantial growth in all
the sectors except plywood. The housing equipment manufacturers in particular predicted a larger increase, whichshows strong sales are expected in theremodeling sector, other than new constructions. Wooden building materials
are also expected to increase due to atrend as “applying wood for interior andexterior”.

<Current Status of
Remodeling Business>
The remodeling business currently ﬁnds
active demand in low-priced projects,
as it had more remodeling projects below 2.5 million yen each compared to
the results in the previous survey. In thesurvey, the overwhelming majority ofrespondents said they were concerned
about “shortage of workmen” before theconsumption tax hike, ahead of “shortage of products” and “price rise”. It
seems that Japanese society as a wholewill need to take more measures tocope with the labor shortage, while thegovernmentʼs reform of working styles
has made it obligatory for employees totake paid holidays.

-2-2-4-4
-7.0
-6-6
-5.4
-8-8

-10Jul-Sep-10
2017

The forecast survey for July-September 2019 is based on the totaled data
gathered from 3,000 client companies in Japan through interviews which
took place from mid-April to early-May 2019.

-6.1-5.7-9.1-8.1
Jan-Mar2018

Jul-Sep
2018

Jan-Mar2019

Jul-Sep
2019

Point0=business result in April-June,1992

Dealing Volume of Lumber

Demand Forecast by Distributors
15106051.9-5.6-5-15

Precut lumber

58-5.5-6.0

Laminated lumber

59

1.90-1061

9.2-3.7-6.3

57

LVL-9.1
Jul-Sep
2017

Jan-Mar2018

Jul-Sep
2018

Jan-Mar2019

56 Jul-Sep

Jul-Sep
2019

2017

Solid lumber
Jan-Mar2018

Jul-Sep
2018

Jan-Mar2019

Jul-Sep
2019

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Jul-Sep 2019）
increaselevel-offdecreaseover15％14 ～ 10％

below10％

below10％10 ～ 14％

over15％

1.3

0.0

21.8

55.1

20.5

1.3

0.0

0.0

3.8

50.0

28.7

15.0

0.0

2.5

0.0

0.0

47.5

46.7

5.8

0.0

0.0

House Equipments（9firms）

0.0

11.1

52.8

23.6

12.5

0.0

0.0

average

0.3

3.7

43.0

38.6

13.5

0.3

0.6

Plywood（13firms）
Wooden Building Materials（10firms）
Ceramic/Heat Insulation（15firms）

International No.55

Trend
Market Outlookof Plywood<Trend of Housing Starts>
Housing starts in May 2019 numbered
72,581 units, 91.2% of the year-ago results, and the total ﬁgure for April-May
was 151,970 units, 92.7% of the same
period of the previous year.

<Trend of Japanese Plywood>
Japanese softwood plywood productionin May 2019 was 255,216 cubic meters,
101.3% of the results in the same monthof the previous year, whereas shipments
were 263,938 cubic meters, 109.6%of the year-ago results. The amount ofstock became 133,201 cubic meters（94.3% of the same term in the previous year）showing that the demand forJapanese plywood remains strong.
Despite the fact that new plywood
factories have been in operation sinceApril, the production volume has notincreased as much as expected. It is assumed that the existing mills are not infull-capacity operation due to the labor
shortage and other issues. The inventories at Japanese softwood plywood
manufacturers are under 0.5 months ingeneral, and the bullish stance is expected to continue for a while.

TopicsKEYTEC（President: Hirokazu Nakanishi）
has constructed a plywood factory of domestic material in Minobu cho in YamanashiPrefecture and started its operation on May
10, 2019. Core businesses of the company
had been the manufacture and sale of structural LVL and the sale of Southsea laminated lumber, but it is planning to respond towidespread demand through manufacturing
and selling domestic softwood plywood in
Yamanashi. KEYTEC, playing an importantrole in the JK Holdingsʼ project that aims touse wood for interior and exterior of largescale and middle-scale buildings, has madeJK Holdingsʼ consolidated subsidiaries,Akita Glulam Co., Ltd. and Miyamori Co.,
Ltd., its aﬃliated companies in January
2019 to enforce its business. As their parentorganization, KEYTEC is trying to improve
its business eﬃciency.

<Trend of Imported Plywood>
Imported plywood arrivals were
186,680 cubic meters in May 2019,67.6% of the results in the same monthof the previous year, showing a substantial drop. By country of origin,
63,754 cubic meters were from Malaysia（65.8% of the year-ago results）,
a big fall, 57,567 cubic meters fromIndonesia（65.8%）, and 51,793 cubic
meters from China（78.3%）. The imports from each country have decreasedin the month with the long holidays as
one factor.

Bulls

The product prices have been weak
due to relatively large inventories atthe ports. Under these circumstances, asigniﬁcant increase in arrivals is hardly
expected for a while. The demand shifting from imported plywood to Japaneseplywood may have been attributed tothe prices which kept rising in the lastﬁscal year in addition to the state ofmaterial log supply in the producing
countries. It would take a little morewhile for the supply-demand balance tobe adjusted.

Wholesalers' Prices of Plywood in Tokyoyen/sheet

Imported Plywood（Structural Use）
Imported Plywood（Concrete Form）
Domestic Plywood［Softwood Plywood for Structural Use(12mm)］
Domestic Plywood［Softwood Plywood for Structural Use(24mm)］

2500

2000

1500

10005000

Dec 2018

Jan 2019

Feb 2019

Mar 2019

Apr 2019

May 2019

KEYTEC
Yamanashi Sawmill Completed3

4

Bulls International No.55

Company

Butsurin Co., Ltd. Established a New Company

Butsurin Co., Ltd.（President Katsumi Tannaka）established a new
subsidiary Timberscape Corporation（President Naokazu Kajii）withtwo core businesses, a construction business specializing in wooden
structure & more use of wood and a park management business. The
new company is in charge of practical business of Toyosu Park Management JV（Butsurin, JK Holdings, Asics Japan, and Oriental Consultants）represented by Butsurin.
Located in Koto Ward, Tokyo, Toyosu is a residential area at themouth of the Sumida River, possessing a great landscape lined withhigh-rise condo towers. It has come into the limelight more than everand continues to develop as a lively place with the opening of theToyosu Market and the establishment of the Olympic Village for theTokyo Olympics and Paralympics.
The new company is going to develop the park management oﬃces,park restaurants, and sports facilities in Toyosu with wooden structures from ﬁscal 2019, under the new concept of “Wood nurturesparks and cities”.

An example of wooden building

Koto Ward Ariake-Nishi Gakuen

Best Award（Prime Minister’s Award）in Excellent Facilities Using Wood Competition FY 2018
Best Award（Minister of Agriculture, Forestry Fisheries Award）in Japan Wood Design Award 2018

“Koto Ward Ariake-Nishi Gakuen”, ofwhich Butsurin Co., Ltd. partly undertook the interior ﬁnish work andcarpenterʼs work, received the best
award, “Prime Ministerʼs award”, atExcellent Facilities Using Wood Competition FY2018. Butsurin Co., Ltd.

supplied 250 cubic meters of solid larch
clapboard（thickness 38mm x width
290mm x length 3650mm）producedin Hokkaido, contributing signiﬁcantly
to the governmentʼs policy to promote
the use of wood in public buildings, theutilization of domestic wood, and the

popularization of large-scale woodenbuildings. The eﬀects of wood is said
to not only bring visual warmth but
also comfort and peace, and to nurturechildrenʼs learning ability. This building
is attracting attention as a model of thewood use in urban areas.

Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3833
E-mail kouhou@jkhd.co.jp
URL http://www.jkhd.co.jp
C 2018JK Holdings Publication Copyright○